British United states Tobacco – Chairman’s AGM Statement – 2020 outlook

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Chairman’s AGM Statement – 2020 perspective

30 2020 april

Our main focus continues to be the health insurance and wellbeing of y our workers. To ensure safety that is best and to minimise the possibility of virus transmission, we’ve implemented a number of preventative wellness measures for the workers all over the world, centered on country-specific circumstances and federal government guidance. It is specially essential for our workers whoever jobs can not be done from your home. I would like to thank each of our employees and lovers due to their efforts that are tremendous help everyone’s wellbeing, along with the success of the company during this time period.

Our ESG that is current priority giving an answer to the ‘whole of society’ approach needed by the that, even as we have actually outlined above. Having said that, I wish to emphasize the higher focus we now have taken to ESG problems generally speaking during 2019.

Sustainability Front and Centre

As explained during the present Capital Markets Day in March, sustainability is front and centre of every thing we do, and then we currently have an obvious business purpose to produce “A Better Tomorrow” for many our stakeholders:

For the customers through offering a better selection of enjoyable much less products that are risky
For culture through reducing the all around health and ecological effects of our company
For the workers by making a powerful and purposeful spot to work, and
For the investors by consistently delivering against our monetary commitments

At our Capital Markets Day, we announced committed sustainability that is new:

To own 50 million customers of non-combustible services and products by 2030
To quickly attain carbon neutrality by that exact same 12 months, and
To create ahead our existing 2030 ecological targets to 2025

2019 Performance – a Operational that is strong Performance

2019 had been characterised by a powerful operational performance and we delivered on our three core priorities, to:

Deliver value in combustibles
Drive one step improvement in New groups
Build an easier, faster organisation

We delivered against all our targets that are financial

Strong reported income development up 5.7% at present prices and 5.6% for an adjusted constant price foundation, driven by the exemplary performance from our combustibles profile, that was up 4.6% additionally for an adjusted constant price foundation
It was running on our strategic combustibles brands, which, driven by continued strong volume and value share growth and strong price/mix of 9%, expanded adjusted revenue 5.6% at constant prices, and

Continued deleveraging of this stability sheet, reducing Adjusted Net Debt**/Adjusted EBITDA*** by 0.5x to 3.5x
A dividend of ukrainian mail order bride 210.4p per ordinary share, a 3.6% enhance, keeping our 65% pay-out policy

This supported further increased investment in brand New groups, focussing on building global brands to guide our differentiated multi-category approach across vapour, tobacco-heating and modern oral items causing:

32% constant currency income development in New groups
11 million customers of non-combustible items, and
New groups income of Ј1.2bn at constant prices, significantly more than doubling revenue from 2 yrs ago and supplying us by having a vital platform for future development

Building An Improved The Next Day

Jack Bowles marked his very very first complete 12 months as CEO, delivering strong leads to 2019, and it is accelerating our aspiration to change our company. The Board and we completely endorse the evolved “A Better Tomorrow” strategy he delivered in the Capital Markets Day featuring its eyesight to simplify the Group, drive value from our combustibles portfolio, and better fulfill evolving customer choices with brand new and revolutionary possibly paid down risk services and products.

The simplification were only available in 2019 using the phase that is first of Quantum, a simple re-evaluation of exactly how we are organised, including:

Redesigning administration levels and duplication that is eliminating
Whilst entrenching accountability, and
Producing capabilities that are new the organization

Venture Quantum may also release funds that are valuable further reinvestment in the future development. We announced an additional period associated with the task at our present Capital Markets Day as well as in total we make an effort to deliver cost cost savings of Ј1bn over 2020- 2022. This further stage will consist of:

Operational efficiencies
Route-to-market focus, and
Supply chain efficiency

We remain focused on continuing the change of y our company in 2020.

Board Structure

I will be extremely pleased to welcome Jerry Fowden, whom brings extensive US experience into the Board. I would ike to thank Kieran Poynter our Senior Independent Director, whom appears down through the Board today. Dimitri Panayotopoulos can be Independent that is senior Director today’s conference.

And while you would expect offered my tenure as Chairman, the Board and Nominations Committee will likely to be focussed on succession preparation for my role, from where we expect you’ll retire at or before our 2021 AGM. Personally I think highly that my successor will inherit a small business that is in exceptional form, that we have always been confident will deliver sustainable development for a long time in the future.

Richard Burrows Chairman

2020 Outlook – Confirming High Single Figure EPS Growth and 65% Dividend Pay-out Policy

We now have regularly delivered on our high figure that is single money profits growth target and we also continue to keep this guidance for 2020.

We now have produced start that is strong the entire year driven by:

Proceeded amount and value share development of 40bps and 20bps correspondingly
Good volume development (with a few reap the benefits of an boost in trade and customer shares), and
Strong cost mix, with rates consistent with our plan